20080922Response to Corvino Petition.pdf

John R. Hammond, Jr., ISB No. 5470
Fisher Pusch & Alderman LLP
U.S. Ban Plaza, 5th Floor
101 S. Capitol Boulevard, Suite 500
Post Offce Box 1308
Boise, ID 83701
Telephone: [phone]
Facsimile: [phone]
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IDAHO PUBUq 'I
UTILITIES COMMlSSIOr1
Attorneys for Applicant
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE
APPLICATION OF MAYFIELD
SPRIGS WATER COMPANY, INC.,
FOR A CERTIFICATE OF PUBLIC
CONVENIENCE AND NECESSITY
CASE NO. MSW-W-08-01
RESPONSE TO PETITION OF
RECONSIDERATION OF
INTERVENOR GERALD J. CORVINO
COMES NOW, Mayfield Springs Water Company, Inc., (the "Company") by and
through its counsel, Fisher Pusch & Alderman LLP and fies its Response to the Petition for
Reconsideration of Intervenor Gerald J. Corvno (the "Petition"). The Company is filing this
Response only to respond to grounds two and thee of the Petition and respectfully requests that
the Commission deny Mr. Corvino relief on each.
RESPONSE
1. The Commission should deny ground two ofthe Petition in the interests of
judicial economy and because granting the relief requested could result in retroactive ratemaking
In ground two ofthe Petition, Mr. Corvino asserts that Final Order No. 30628 "authorizes
a windfall profit for the Company in the collection of connection fees that the Commission found
to be uneasonable."
OR\G\NAL
RESPONSE TO PETITION FOR RECONSIDERATION OF ORDER 30628 - 1
The Commission stated that "the Distrct Cour in its Memorandum Decision dated
August 4,2008 has essentially granted Mr. Corvino's request for a refud of any and all monies
requested before the date Mayfeld fied its Application for a Certificate." Order No. 30628 at p.
17. The Distrct Cour in its Memorandum Decision is curently considering what level of
refuds/damages, which would necessarly include any hookup fees paid if any, customers
should receive. To reopen this instant matter would duplicate the proceedings currently ongoing
in the Distrct Cour and create the possibility that the forus could reach differing results. In
addition, the added cost of defending the same issue in two forums puts fuer financial strain
on the Company, a small water company with a possible rate ofretu of$1,615.00 anually.!
Accordingly, il the interests of judicial economy the Company respectfully requests that the
Commission defer to the District Cour on ths issue and deny ground two of Mr. Corvino's
.Petition for Reconsideration.2
In addition, the Company stil asserts that to order refuds would amount to retroactive
ratemakilg. See Arkansas Louisiana Gas Company v. Hall et al., 453 U.S. 571, 101 S.Ct.2925,
60 L.Ed.2d 856 (1981) ('''the Commission itself has no power to alter a rate retroactively. When
the Commission finds a rate uneasonable, it "shall determine the just and reasonable rate. . . to
be thereafter observed and in force." § 5 (a), 52 Stat. 823, 15 U.S.C. § 717d (a) (emphasis
added). See, e. g., FPC v. Tennessee Gas Co., 371 U.S. 145, 152-153 (1962); FPC v. Sierra
i Litigating these issues in two forums wil undoubtedly cost the Plaintiffs in the Distrct Cour to incur additional
costs as well.
2 To the extent consideration of whether to award refunds is analogous to awarding damages see Utah Power &
Light Co., v. Idaho Public Utilties Commission, 107 Idaho 47, 49, 685 P.2d 276, _ (1984) quotig the
Commssion:
(tJhe statutes governing rehearing, appeal and stay of our orders, and the general prohibitions
against settng rates based upon previous periods of uneasonably high or unreasonably low rates,
admt no other constrction. We are a regulatory Commssion, not a cour oflaw, and have no
authority to award damages except as given to us by statute.
RESPONSE TO PETITION FOR RECONSIDERATION OF ORDER 30628 - 2
Pacifc Power Co., 350 U.S. 348, 353 (1956). This rule bars "the Commission's retroactive
substitution of an unreasonably high or low rate with a just and reasonable rate.' City of Piqua v.
FERC, supra, at 12,610 F.2d, at 954.") Furher, in the event the Commission decides to
consider this issue the refund period should only date back to the date on which the Company
filed its original Application and it was put on notice that its rates were being investigated
through Commission Order No. 30512. Public Utilities Commission of the State of California v.
F.E.R. c., 462 F 3d 1027, 1062 (9th Cir. 2006) ("If FERC finds a rate unjust and uneasonable
pursuant to a § 206 complaint, it must order imposition of a just and reasonable rate; however,
the refud is limited to periods subsequent to the "refud effective date" established by FERC.")
In the event the Commission desires to investigate ground two of the Petition for
Reconsideration further, the Company reserves all defenses including the right of set off.
Previously, the Company stated in its Reply Comments that it would not seek the recovery,ot
anydefiçiency in collections for water service that would result ifthe Commission authorized.
rateexcêeded the interim rate of$50.00 per month. Reply Comments at p. 13. The Company in'
the interest of customer relations made the decision to not seek recovery of any resulting
deficiency back to February 8, 2005.deficiency. However, due to customers' repeated requests
for refuds the Company must now withdraw its offer, to the extent necessar, on this issue in
order to preserve the defense of set-off. To the extent the Commission considers whether
refunds should be issued to customers for connection fees the Company respectfully requests
that: 1) the Commission recognize that many customers where not biled for services for several
months prior to Januar 2007 and as such a value for these services should be calculated as a
setoff against any potential refunds; 2) the Commission should allow the Company to recalculate
all customer rates, including for the common area, back to the date service was first provided
RESPONSE TO PETITION FOR RECONSIDERATION OF ORDER 30628 - 3
based upon the Commission approved rates for service as set forth in Order No. 30628; and, 3)
the cost per connection would likely have been higher than the Commission approved amount
during times when construction and lot sales were booming in the Treasure Valley causing high
demand for services and equipment leading to higher costs for development.
Based on the foregoing the Company respectfully requests that the Commission deny Mr.
Corvino relief on ground two of his Petition.
2. The Company will not assess interest on the portion/amount of a customer's late
and outstanding account balance for water service specifically related to late fees that may have
been previously assessed by the Company.
In ground thee of the Petition, Mr. Corvino asserts that Final Order No. 30628
"authorizes the Company to collect interest on late charges the Commission ruled "excessive"in
the cases where customers refused to pay the 'excessive' charges.
The Company will not seek to assess the Commission approved 1 % late fee on the
amount of any late fees (any amount charged other than 1 %) that may have been assessed on
customers for their failure to pay for water service. The Company reserves its right to assess the
Commission approved late fee on all past due accounts (not including amounts for previously
imposed late charges) back to the date on which the Company first began biling for its services.
RESPONSE TO PETITION FOR RECONSIDERATION OF ORDER 30628 - 4
CONCLUSION
Based on the foregoing, the Company respectfully requests that the Commission
deny grounds two and three ofIntervenor Gerald Corvino's Petition for Reconsideration.
DATED THIS~day of September, 2008.
MAYFIELD SPRIGS WATER OMPAN, INC.
RESPONSE TO PETITION FOR RECONSIDERATION OF ORDER 30628 - 5
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on thWday of September, 2008, a tre and correct copy of
the foregoing document was served on the following individuals by the method indicated below:
Jean Jewell
IDAHO PUBLIC UTILITIES COMMISSION
472 W. Washington St.
POBox 83720
Boise ID 83720-5983
Don Howell
Krstine A. Sasser
Deputy Attorney General
IDAHO PUBLIC UTILITIES COMMISSION
POBox 83720
Boise ID 83720-0074
Gerald J. Corvrno
11865 W. Tustrn Lake
Kuna ID 83634-5032
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RESPONSE TO PETITION FOR RECONSIDERATION OF OJIER 30628 - 6
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